Wednesday, February 29, 2012

Over the past twelve years the average 401(k) return has been just about zero. Is that all the stock market’s fault? Or, are the funds in our 401(k) plans to blame? The answers are yes and yes. Over the past twelve years we know that the stock market has returned just about nothing and the funds inside of your 401(k) are for the most part pretty crummy.

What can you do about that sort of environment and the corresponding investment returns? There are three things I advise: cut risk, add interest and dividend income and make several tactical asset allocation moves per decade.

In advising clients, we have used a simple strategy for 401(k) investing that has worked extremely well for people at least five years away from taking income distributions. We select a default 401(k) setting of about one half of our money in fixed income subaccounts and the other half in stock funds that pay some dividend. The specific funds we select have to do with our choices and where we are in the economic and interest rate cycles.

Why do we take such a conservative default position? There are a number of reasons.

The first reason is that a 401(k) balance is a big part of most people’s retirement savings. It should not be put at high risk as most people cannot overcome losses fast enough given an ever closer retirement. Having 80% to 100% of your funds in equity subaccounts, which is what many do, exposes a 401(k) to almost all of the stock market risk. That is simply too much risk for a core asset.

Next, most mutual funds, called subaccounts in your 401(k), are pretty mediocre. There are few truly outstanding funds in most 401(k) because of how the plans are sold and set-up. While I have seen and set-up plans that have outstanding investment options, most plans I come into contact with are mediocre at best.

Finally, most people only rebalance their 401(k) about once per year. By contrast, the average institutional account, i.e. a pension or endowment, is rebalanced about eight times per year. In order to maintain an active and engaged 401(k) strategy, a person must be active, engaged and skilled. Most people do not fall into that subset of 401(k) owners simply because they are too busy.

There is an exception to the roughly 50/50 fixed income to equity approach. When the stock market has a serious correction, down 30% or more, it makes sense to increase your equity exposure to around 80%. As the market then rebounds to previous highs in later years, gradually move back to the 50/50 blend. In most decades you will only need to trade four or five times. Buy low and sell high can actually work if you have a simple system in place.

If you are younger and looking for an aggressive investment approach, what I have found to be a good place is within a Roth IRA. Roth IRA balances are generally smaller, thus can do less damage to your overall finances if losses occur versus if you suffer big losses in a larger 401(k) account. Also, in a Roth IRA custodied at a brokerage, you will have many investment choices from which to choose. Finally, there are substantial tax and liquidity advantages to a Roth IRA which coincide well with more aggressive investing.

What I have described is an easy and effective way to grow your retirement balances. It will also help you sleep at night knowing you are not taking a high risk approach with what is likely your largest piece of retirement money. For a handful of people, managing a 401(k) can take a more aggressive look, but for most people, a conservative approach makes a lot of sense.

-- Spano is the founder of Bluemound Asset Management, LLC in Elm Grove, as well as a columnist for MarketWatch.com of the Wall Street Journal network and a contributor to other financial publications. Spano is available to consult on financial planning, investment management and retirement planning. Visit http://www.BluemoundAM.com

Tuesday, February 28, 2012

It's not often that small businesses look favorably upon the Internal Revenue Service. Typically, the entrepreneurs of Main Street respond to any IRS directive with fearful uncertainty. Such was the reaction displayed upon learning that the nation's tax collector had issued a new costly and time-consuming paperwork requirement.

It began as a new line slipped on the annual small business income tax return. IRS regulators decided that the government was being short-changed by businesses not reporting or underreporting their electronic payments and they proposed to close the gap by forcing small businesses to reconcile gross receipts with the figures reported on a new form: The 1099-K.

Perhaps the IRS thought no one would notice, but the National Federation of Independent Business exists primarily to prevent just such encroachments by state and federal governments. Sometimes they're huge assaults, such as President Obama's unconstitutional health reform law, but more often they're little legal ditties that can cause big headaches for the free enterprise sector.

As it has done for nearly 70 years, NFIB maintains an especially close eye on federal revenuers—no easy task given the workforce of more than 100,000 tax examiners, revenue agents and collectors. Upon discovering that new 1099-K paperwork mandate, NFIB immediately called on the IRS to eliminate it, warning officials that this could further undermine the sagging confidence of small-business owners and create yet another paperwork headache – taking time and expenses away from running their businesses.

NFIB shared small business' concerns that something as simple as a customer's request for a cash-back transaction on a debit card purchase could significantly increase owners' paperwork burdens. In addition, the demand could task them unnecessarily with sorting through payment certificates to subtract state and federal point-of-sale taxes that third-party processors aren't always able to separate.

To its credit, the IRS agreed that the taxes captured wouldn't be worth the damage inflicted on the nation's job creators. Not only did the agency drop the requirement for the 2012 tax year, but officially stated that it had no intention of requiring such reconciliation in the future.

Had the nation's leading small-business watchdog not earned this victory, the choices facing millions of entrepreneurs would have been painful. Customers would be lost if their payment options were limited. Owners would have been forced to invest scant earnings in unnecessary accounting systems, waste countless hours of management time sorting through receipts or pay professional tax services to handle the chore.

Also contributing to this win for Main Street were friends of small business on Capitol Hill. The rollback was supported by U.S. Sens. John Thune of South Dakota and Maria Cantwell of Washington state, and Illinois Reps. Aaron Schock and Bobby Schilling. And to ensure the IRS will not threaten small firms in the future with such nuisance paperwork, protective legislation has been introduced in both chambers.

This small, but important victory isn't likely to change small-business owners' opinion of the IRS, but it does offer some much-needed encouragement for those who bear the responsibility of serving as the backbone of the nation's economy.

-- Danner is president and CEO of the National Federation of Independent Business, which represents 350,000 small-business owners in Washington, D.C. and every state capital.

Friday, February 24, 2012

Did you hear it? It was almost audible, the sound of Milwaukee Brewers baseball fans breathing a collective sigh of relief this week as Brewers leftfielder Ryan Braun won the first-ever appeal of a Major League Baseball drug test.

But there was also another sound, the sound of implied guilt. As Mr. Braun said in his press conference on Friday, the scrutiny he endured is just the opposite of what is found in the American legal system: Guilty until proven innocent.

Point taken, Mr. Braun. Let’s take this opportunity to look at what you’ve done right in this unfortunate situation and what you and your PR team should be thinking about going forward. Ultimately, what happened at the press conference and in the future days are what will decide your standing among the public. And therein lies the value of not just good, but great PR advising.

First of all, you hit a home run with your press conference, maximizing the best opportunity you will ever have to restore your image. You were genuine, believable and articulate, and you needed to be. You avoided legalese and simply stated when you couldn’t elaborate. Others in your position have taken a very defensive stance; that doesn’t play well with the media or with the fans.

You thanked all the most important people, most critically, your fans. Instead of a “woe-is-me” attitude, you acknowledged how difficult this challenge has been for you, and rightly so. No one, not your fans or your detractors, would disagree with that.

In your early comments, you said you would willingly have taken on responsibility for the situation … had it been appropriate. And you proved that by taking responsibility for some of the more personally unfortunate rumors that have been circulating, addressing the STD issue clearly and succinctly.

Your advance preparation was outstanding, and you were able to give some level of detail, including dates, putting the media on your side. The media have a story to write, to flesh out with those details, and your side of it will get more coverage than if your advisors had suggested a more limited approach. You won people over with specific, quotable statements: “We won because the truth is on my side.”

Keep up that push back; it’s an active way to manage your image rather than waiting for someone else to define it. This also helps you to avoid the impression that you used performance enhancing drugs. It’s not about that anymore; it’s about your innocence and the breakdown of the testing process.

Yet, going forward, never go back to this level of detail. It’s not necessary. Keep your comments on the issue to general statements, and regardless of the situation, never be defensive. The best way to prove your point is through your play on the field.

Others can answer those questions. Be prepared though: Your abbreviated question-and-answer session didn’t answer everything, and anything you haven’t addressed will now be answered by others. But that was an understandable sacrifice that needed to be made.

The decision awarding your appeal was based on another great quotable phrase “the process broke down.” And you stayed on that message. You assaulted the process and made that the issue. With this press conference, you’ve changed the perspective.

So what’s ahead, Mr. Braun? I think your words will be buttressed by the arbitrator’s report, which will only serve to affirm the points you’ve made. That’s no mistake, either. That, along with the rest of the work you and your people did today, is the work of a top-notch PR firm. Having a winning strategy is something that all organizations can learn from, not just those dealing with messy issues in the sporting world.

-- Blumb, a partner at Milwaukee-based Nation Consulting, has more than 20 years of PR experience in professional sports, including a long stint as director of public relations and top spokesperson for the Green Bay Packers. Reach him at blumb@nationconsulting.com.

When Wisconsin entrepreneurs smell opportunity, it sometimes smells like fish. Or freshly brewed beer. Or a cheese-based protein energy drink.

The diverse group of competitors in the 2012 Wisconsin Governor’s Business Plan Contest offers the latest evidence that not every startup idea is required to cure cancer or turn your mobile phone into a personal concierge. Sometimes, innovation begins close to home – in the kitchens, backyards and basements where “what if?” epiphanies so often occur.

As usual, this year’s contest features plenty of mind-stretching ideas from Wisconsin’s biotech labs and software incubators. The contest also gives a sense of place about Wisconsin, where entrepreneurs are just as likely to imagine using technology to devise a more accurate bow sight, build a cleaner snow-blower or schedule a more efficient round of golf.

Among the 248 first-round entries in this year’s contest were 21 related to food, spanning innovations in how to grow it, harvest it, prepare it and deliver it. There were even a couple of plans on how to better handle food waste. None of this should be surprising in a state where farm exports grew by 18 percent in 2011 over the previous year, and where trends such as the “locally grown” movement have taken root.

Another 15 plans were tied to sports – predominantly outdoor sports, from golfing to archery to fishing. Three plans take tech-based angles on the nation’s $42 billion fishing industry, although no one has yet figured out a way to coax fish out of the water.

Three plans envisioned brew pubs, a familiar idea, melding with social media, art and local music in ways that can attract new customers. Call it “craft beers meet the creative class.”

The contest’s broad categories – advanced manufacturing, business services, information technology and life sciences – haven’t changed since the BPC was launched in 2004 as the nation’s first statewide, tech-based business plan contest. But the trends within those categories have shifted over time to reflect changes in major sectors.

For example, the contest’s early years generated a number of life science entries in the diagnostics and “toolkit” arenas. That was expected: Wisconsin’s biotech industry continues to be known for producing analytics and products for other researchers. It’s the modern equivalent of selling picks and shovels to California gold miners in 1849.

Over time, however, the life sciences category attracted more ideas for drug discovery and medical devices as the state’s health sciences economy matured. Of late, it has also featured more ideas from research universities in Milwaukee, where medical research consortia are beginning to produce young companies.

Energy generation and management and other “cleantech” ideas were barely on the list in the contest’s first few years but they’re a recurring theme today as society struggles to better manage its use of energy, water and other resources. Those entries, from renewable energy systems to conservation techniques, tend to be spread over all four major categories.

Wisconsin is still a leading manufacturing state. Many ideas in the advanced manufacturing category reflect the fact that tomorrow’s manufactured products may be created or improved with the help of technology. From papermaking to wheelchairs, from power electronics to advances in micro-tool cutting performance, the list includes entries that could transform how things are made.

Sometimes overlooked in Wisconsin’s prominence in agriculture, manufacturing and life sciences is an emerging strength: software, internet applications and mobile technologies. Some of those ideas include virtual network infrastructure management for small businesses; software that can help improve health-care costs or quality; and ways for students, businesses, parents and consumers to manage information.

Some ideas make you wonder why someone else didn’t do it first, such as smart phone apps to help shoppers match clothes on the spot to a variety of educational gaming programs that will help kids learn in ways that entertain without over-stimulating.

This year’s plans were entered by entrepreneurs from 81 of Wisconsin’s largest cities and smallest communities. Also, a handful of ideas came from entrepreneurs outside Wisconsin who have signaled they want to move or expand here, which is a testimony to the state’s growing entrepreneurial reputation.

The contest will soon be narrowed to about 50 entries and winners will be announced in June at the Wisconsin Entrepreneurs’ Conference in Milwaukee. If past is precursor, the two-dozen or so finalists will be more likely to survive (77 percent for all finalists from 2004 through 2011 are still in business), raise more private investment dollars (52 percent of past finalists have done so) and more quickly add jobs.

Best of all, most of these entrepreneurs look a lot like the state that helped shape them. They’re foodies, golfers, anglers and more – and, most important, they’re innovators in an economy that sorely needs them.

Wednesday, February 22, 2012

Two keynote speakers will explore some new trends in food and farming when the 23rd annual Organic Farming Conference is held this week in La Crosse.

Margaret Krome, the policy program director for the Michael Fields Agricultural Institute, will speak about “Growing Food, Health and Democracy: How Farmers, Activists, and Consumers are Finding Our Power and Transforming the Food System.”

Filmmaker Curt Ellis will make a presentation called, “Growing Forward: The New Faces of Food and Farming.”

The conference, presented by MOSES (Midwest Organic & Sustainable Education Service) is expected to draw more than 2,900 participants, 160 exhibitors and feature more than 65 workshops.

Krome will explore how to “support the pragmatic goals of personal and community health, fair markets and fair access to good food.” She will trace the “building blocks for individual action, political influence and ‘how we can use out movement’s creativity and energy to build sound agriculture that can be a foundation for restoring democracy in our nation‘.”

In the conference promotion of Krome’s presentation, it contends that “for reasons both political and social, the nation has come to a turning point in agricultural policies.”

Krome oversees MFAI’s policy program. In this capacity, she coordinates the annual national grassroots campaign to fund federal programs supported by the National Sustainable Agriculture Coalition.

Over many years, she has collaborated to create and sustain funding for a number of state initiatives supporting “environmentally sound, profitable, and socially responsible agriculture.”

Krome’s work and opinions also are known through a bi-weekly editorial column she writes for The Capital Times in Madison.

Ellis is the maker of the film “King Corn,” co-founder of the Food Corps and winner of both the Heinz and Peabody awards for his video and film work.

King Corn is a feature documentary film released in October 2007 following Ellis and a college friend, Ian Cheney, as they move from Boston to Greene, Iowa, to grow and farm an acre of corn.

In the process, Cheney and Ellis examined the role that the increasing production of corn has had for American society, spotlighting the role of government in the “industrialization” of the crop. Their contention is that the trend has led to the demise of family farms in favor of larger industrial farms.

Through what is described as a “video-rich, multi-format” presentation, Ellis will report on a new generation of leaders who are getting back to the land and attempting to reverse the industrialization trend.

“Who are these young leaders that are stepping up to work the fields, milk the goats and write policies that are transforming the way we farm and eat?” reads the conference description of Ellis’ presentation. “What galvanized their interest in healing the environment and fixing food? How can we harness their passion and create a world where every child can grow up with knowledge of what good food is, a hands-on connection to where it comes from, and daily access to its nutrients?”

Conference workshops will range from exploring soils and systems to marketing and business. Cynthia Cambardella of the USDA’s National Laboratory for Agriculture and the Environment will explore the “Basics of Soil Structure and Management Practices That Favor Development of Soil Health” on Friday, Feb. 24.

Michael Phillips, author of The Apple Grower, will explore holistic orchard management while Thaddeus McCamant of Northland Community and Technical College will look at organic strawberry production.

University of Wisconsin researchers Erin Silva and John Hendrickson and farmers Jim Munsch and Linda Halley will detail whole farm management systems to increase farm profitability.

Several workshops are on marketing for local food initiatives and Community Supported Agriculture efforts.

An annual favorite on the first day of the conference, Feb. 23, is the Organic University, which presents 10 pre-conference courses. The full day courses are geared to novice and experts alike.

Farmers, academics and various experts provide more than six hours of background information and practical applications. Resource books also are provided for the courses so participants can continue to study beyond the end of the courses.

The MOSES Organic Farmer of the Year will be named at the conference. The award is given annually to an organic farmer who practices “outstanding land stewardship, innovation and outreach.”

More than 50 organic and sustainable agriculture companies and organizations help sponsor the conference.

Somebody's been messing with your reputation online, posting things that are untrue. You saw it, your clients saw it – heck, for all you know, the whole world saw it – and you're not taking it lightly. There'll be a showdown at the WWW-dot-Corral one day, but the problem is, you don't know who you're dueling with.

How can you fix this mess? Can you make sure it doesn't happen again?

You can, according to Michael Fertik and David Thompson. In their new book "Wild West 2.0", your business can survive the Technology Frontier.

Without a doubt, there are plenty of nefarious things that are done on the Internet, and you simply can't ignore them. Even if you're not a big fan of the web, your family, friends, and clients are.

For the most part, the online community is a good thing and its citizens behave in a civilized manner. But it takes just seconds for a juicy rumor or nasty comment to "go viral" and spread around the world for anyone to read. If you're the target, you rarely have legal recourse.

The thing to remember is that trying to remove or squash a reputation-ruining web page only makes things worse. Search engines like Google have algorithms that put the most-viewed websites at the top of a search. Fretting, checking, and re-checking a worrisome website just raises its position. Don't do it.

So what can you do?

"Understanding the technical nature of the Internet is the first step toward monitoring and managing your online reputation," the authors say. Also know that, once something is online, it can move into obscurity but it will never disappear completely. Search engine companies, by the way, almost never remove postings.

To be proactive and protect your reputation, know your audience. In reality, who will view those offensive websites and who will care? Let the furor die down on its own, if possible, and ask friends to post neutral or positive things on their own sites to counteract the bad. Sign up for as many email addresses and domain names you can find, using your name and its varieties. Monitor your name on a regular basis.

Somebody rustlin' up a heap o'trouble for your business? "Wild West 2.0" can help you put the varmints in their place.

Starting with history and a list of the good and bad that the Internet has to offer, authors Michael Fertik & David Thompson make it perfectly clear that terrible web things can happen to decent businesses and that while you have little recourse, there are steps you can take to minimize the damage. Although I'm as tech-savvy as the next person, I was stunned at the authors' stern reminders of the power of the Internet. Who knew that a business book could be scarier than any horror novel?

If you use the Internet for business but are concerned about its downside, this book is a must-read. Having "Wild West 2.0" around is like calling in the posse

-- Schlichenmeyer has been reading since she was three years old and she never goes anywhere without a book. She lives on a hill in Wisconsin with two dogs and 11,000 books.

There's a scene in "The Princess Bride," shortly after the hero Westley is apparently tortured to death by Prince Humperdinck, in which Westley's friends bring his body to the cottage of Miracle Max – played by Billy Crystal.

OK, you probably don't remember that scene unless you've seen the movie a bunch of times. But Miracle Max examines the body and declares Westley is only "mostly dead," which means revival is possible. Had Westley been "all dead," Miracle Max explains, he could have done nothing more than search his pockets for loose change.

That scene comes to mind as the State Capitol debate over venture capital legislation starts to lose its pulse. State revenue estimates released last week turned a small budget surplus into a $143-million deficit, and potential sponsors of proposals for a state-leveraged fund to invest in start-up companies are glum about getting anything passed in this floor period.

Before everyone starts checking pockets for loose change, it's worth considering why a well-crafted early stage capital program for Wisconsin need not cost the state money it doesn't have – and help build revenues for future budgets.

First, some of the strategies being considered by lawmakers would not require a lot of spending in this budget cycle. The cost of using tax credits, for example, would be at least partially delayed. For example: A proposal under review by the Wisconsin Economic Development Corp. would recycle unused tax credits for an investment program largely limited to early stage deals.

Second, all of the plans have envisioned state dollars being used to attract private dollars from angels and venture capitalists in Wisconsin and beyond. It's not as if the state would be the only investor.

Third, it is an investment – not a gift. If the state is treated like a limited partner, just like private investors, it would stand to get back its principal and other returns over time.

Fourth, and perhaps most important, angel and venture capital investments are a proven way to grow promising young companies – which, in turn, create most jobs over time. In addition to a "return on investment," the state would also get a "return on tax dollars" through economic growth, sales tax revenues, income tax revenues and more.

The core reason to launch an early stage fund for Wisconsin is company creation in the short term and job creation over time. Despite having the right ideas, intellectual capital and research investments, Wisconsin has historically lagged in attracting investment dollars for emerging companies.

In 2011, Wisconsin companies raised just $72 million in venture capital, a drop from 2010 and in line with the state's five-year average of $72.1 million. States with workforces of similar size – Arizona, Colorado, Indiana, Maryland, Minnesota, Missouri and Washington – all outperform Wisconsin when it comes to venture capital. Five-year averages in those states range from a low of $78.6 million in Missouri to $778.7 million in Washington.

Minnesota, a neighboring state with a very similar workforce and culture, has averaged $327.8 million in venture capital investments over the past five years. Minnesota has raised $6.5 billion in venture money over the past 40 years, compared to $1.2 billion in Wisconsin.

Over time, that competitive difference has delivered 447,285 jobs for Minnesota – or 19 percent of its private workforce in 2009. In Wisconsin, there were 60,156 venture-backed jobs for the same year, according to federal and industry data. That represents only 3 percent of Wisconsin's private workforce. The U.S. average is 11 percent of the private workforce, or nearly 12 million jobs.

Had Wisconsin simply performed at the U.S. average for attracting venture capital, that investment would have produced 259,215 jobs in Wisconsin during a time when some sectors were losing jobs by the tens of thousands.

Wisconsin's investor tax credit law, which took effect in 2005, provided a lift for a while, but other states have caught up when it comes to attracting venture capital and are pulling ahead. Ohio, Michigan, Indiana, Illinois and Minnesota have all taken more recent steps to spur investment – and done so with broad political support.

Plans for an early stage capital bill are "mostly dead" for now, as comic actor Crystal might say. But whether it's this floor period or the next, the state Legislature should breathe new life into an idea that will help Wisconsin's economy for years to come.

-- Still is president of the Wisconsin Technology Council. He is the former associate editor of the Wisconsin State Journal in Madison.

Wednesday, February 15, 2012

You've no doubt heard of "out-sourcing" – the practice of American companies moving jobs overseas, often to save money on labor costs.

The flip side these days is "in-sourcing," which is the growing trend of companies deciding it sometimes makes better business sense to bring jobs home.

Stressing the merits of in-sourcing is one reason why President Obama paid a visit Wednesday to Oak Creek's Master Lock Co. Since mid-2010, Master Lock has bought back about 100 union jobs from China to its Milwaukee factory.

The president also mentioned Diamond Precision, a machine manufacturer that is expected to add dozens of jobs in Milwaukee, and Collaborative Consulting, an information technology company that plans to open a call center in Wausau. Both are companies that chose not to out-source jobs.

Obama wants to encourage other U.S. companies to do the same, and has proposed targeted tax incentives to help them do so.

While visiting Master Lock, Obama called for every multinational company to pay a basic minimum tax to ensure they do not benefit from moving jobs and profits overseas to avoid paying their fair share of taxes.

He also called for lowering the tax burden on manufacturers operating here, saying they should get aid to cover expenses for moving jobs back to the United States; that high-tech manufacturers should see their deduction double for making products here; and that those relocating to communities hard hit by factories leaving town should get financing for a new plant, equipment or training for new workers.

"It is time to stop rewarding companies that ship jobs overseas and start rewarding companies that are creating jobs right here in the United States of America," Obama said.

Tax breaks alone won't turn the tide of out-sourcing, however. There are many reasons why companies shift some jobs overseas. Often, it's simply about being closer to emerging markets. If you're selling refrigerators in China, for example, it might make more sense to build them there and avoid transportation costs.

Technology itself plays a role. While tech innovation has made businesses more efficient and productive, it has also made some jobs obsolete. In a world where the Internet is king, companies can set up shop just about anywhere so long as online connections are robust.

But as the wage gap closes and transportation costs from overseas back to the United States rise, out-sourcing is not the slam dunk it once was for American companies. Just like there are skilled labor shortages in the United States, the same can hold true overseas. American companies also worry about language barriers, security, quality of worksmanship and other factors that can tip the balance between out-sourcing and bringing jobs home.

For in-sourcing to become more than a mini-trend, however, companies must know they can find skilled workers at home. That's why many companies, Master Lock included, establish partnerships with trade schools, technical colleges and other institutions of higher learning.

Obama addressed the need for better trained workers when he reminded his Wisconsin audience that he's asked Congress "to join me in a national commitment to train 2 million Americans with skills that will lead directly to a job. We need to give more community colleges the resources they need to become community career centers."

Companies also want the emphasis of building basic skills – especially in science, technology, engineering and math – to seep down into high schools and middle schools. But that's a longer-term project that must involve companies themselves, as well as educators and parents.

In-sourcing is a welcome trend. Just don't expect a tidal wave of returning jobs based on tax breaks alone. Other business costs and the building the right labor force are just as essential to bringing American jobs home.

-- Still is president of the Wisconsin Technology Council. He is the former associate editor of the Wisconsin State Journal in Madison.

Long hours and hard work comes with owning a small business. Few entrepreneurs would have it any other way. It's the price they pay to live their American dream.

But not everyone welcomes overtime and extra effort to get the job done. The IRS, National Taxpayer Advocate Nina Olson reported to Congress recently, is suffering "workload overload," chiefly due to the increasing complexity and frequent changes in the U.S. tax code. Between 2001 and 2010, the revenue rulebook was revised 4,430 times—an average of more than once a day.

That won't surprise small-business owners, who bear the brunt of unending alterations to tax requirements and paperwork. That's why nearly 90 percent now hire professional tax preparers to complete their returns.

Where Main Street and Washington differ is about the solution. Olson says the IRS needs more money. President Obama agrees. His FY2012 budget request for the agency jumped nearly 10 percent to $13.3 billion, partly to add 5,000 more employees to a tax-collecting force that already exceeds 100 thousand workers.

The National Federation of Independent Business, the nation's leading small-business organization, has been telling Washington for years that the solution is not more money or more agents and enforcers, but true tax reform. Don't fix just the incomprehensible code, but also enlighten IRS employees to appreciate the vital role free enterprise plays in creating jobs and stabilizing the economy. They need to realize that small businesses aren't miniature versions of big corporations; 75 percent file their taxes as individuals. Compliance with today's tax rules costs them nearly 70 percent more on average than large firms pay.

Since Tax Day, April 17, is close, perhaps it's a good time to offer some helpful tax tips, not for filers, but for members of Congress and the president. These simple, but crucial reforms can ease the burden on both small-business owners and government tax writers.

Tip No. 1: Simplify the code. This could save small-business owners much time and money that they will re-inject into rebuilding their enterprises and help lower unemployment. Plus, it could reduce taxpayer errors, bringing in more revenue to trim the federal tax gap.

Tip No. 2: Keep tax rates low for small businesses. Again, the more money they retain, the more they reinvest in growth and workforces.

Tip No. 3: Find a permanent solution to the estate tax that protects all family businesses. Future generations should be able to keep family businesses alive and contributing to the economy.

Tip No. 4: Get rid of the Alternative Minimum Tax. It has outgrown its original purpose and has now begun gobbling up middle-class taxpayers' earnings.

Tip No. 5: Allow self-employed business owners who buy their own health insurance to deduct 100 percent of their premium costs.

There are many additional repairs that can improve the tax code. New legislation by U.S. Reps. Aaron Schock and Bobby Shilling and Sens. John Thune and Maria Cantwell to revise 1099-K rules is among them. But by implementing these five quickly, Washington can restore certainty for America's entrepreneurs, pave the way for greater code improvements and unburden many overworked IRS employees.

-- Danner is president and CEO of the National Federation of Independent Business, which represents 350,000 small-business owners in Washington, D.C. and every state capital.

Thursday, February 9, 2012

Gordon Gee is president of The Ohio State University, the nation’s third largest in terms of students and a research leader with a reported R&D budget of $828.5 million for 2010-2011. One might think he has better things to do than chastise the UW-Madison’s football coach.

But that’s precisely what Gee did recently in an interview with Ohio State’s student newspaper, The Lantern, during which he said Wisconsin coach Bret Bielema should “get a life” and quit fretting over whether or not Buckeye head coach Urban Meyer poached a prime Badgers recruit.

“We hired the best coach and we went out and got the best kids so get a life,” Gee said.

Given that Ohio State’s football team was banned from playing in a bowl game in 2012, the result of a probe by the National Collegiate Athletic Association, one might think silence on all things football would be a wise course for Gee. Not so. In the same interview, Gee referred to the NCAA investigation as a “year-long colonoscopy.”

Gee is respected among the small fraternity of university presidents and chancellors. In fact, he’s held more university presidencies (West Virginia, Colorado, Brown and Vanderbilt before Ohio State) than anyone else in U.S. history. He’s reportedly the highest paid public university president in the country and was ranked the nation’s best college president in 2009 by Time magazine.

So why is the same academic all-star who eliminated the athletic department at Vanderbilt in 2003, folding it into the Division of Student Life, getting drawn into a squabble among competing coaches? Answer: Big-time college athletics has become the tail that wags the dog.

Don’t get me wrong: I’m a college football fan who bought season tickets at Wisconsin during an era when the Badgers won six games in three years. I also understand that participation in college sports is a pathway to higher education for kids who might otherwise never come near a classroom after high school. I teach one class at the UW-Madison, so I’ve learned that some of the best disciplined students are student-athletes. They learn how to manage their time.

The problem has become the near-obsession with college sports, especially top-tier football and basketball, among universities that are competing for students, alumni donations and public attention. It’s Money Ball on an amateur scale.

Many people can recite the weekly NCAA rankings of the nation’s top 25 teams, but almost no one can tell you which American universities raise and spend the most when it comes to research. (For the record, Johns Hopkins University in Baltimore, Md., is No. 1 year after year and Wisconsin has been a top five R&D school for the past 20 years.) Sure, knowing how much Ohio State spends on cancer research may not be as entertaining as the gridiron rivalry with Michigan, but guess which endeavor is most likely to save your life or the life of a loved one?

Ohio State coach Meyer most recently coached at the University of Florida, a Southeastern Conference school that produces football teams much like other teams in the SEC – big, fast and likely to stomp on their non-conference competition. In hiring Meyer, always known for his aggressive recruiting style, Ohio State was just trying to keep up with the NCAA Joneses – something Wisconsin would do, as well, if and when it had the chance.

The question is whether universities are evolving from places where students are also athletes to training grounds for quasi-professional athletes disconnected from learning. There could be lasting damage to higher education if American universities continue to allow the public to think performance on the football field or basketball court is more important than performance in the labs and classrooms.

Universities such as Wisconsin and Ohio State should be judged by what they contribute to the well-being of society, to the economy and to democracy. If college sports help spotlight those goals while entertaining and uniting people, so much the better. But if anyone needs to “get a life,” it’s those folks who occasionally lose sight of why higher education exists in the first place.

-- Still is president of the Wisconsin Technology Council. He is the former associate editor of the Wisconsin State Journal in Madison.

Wednesday, February 8, 2012

In his State of the Union address, President Obama described "an economy built on manufacturing" and outlined strategies to help American industry continue a recent trend of bringing offshore jobs home.

A few days later, the federal Bureau of Labor Statistics dusted off its crystal ball and predicted that manufacturing's share of all U.S. jobs will fall from 8.1 percent in 2010 to 7.0 percent by 2020.

The contrast in outlooks was hard to miss. While Obama was calling for tougher enforcement of trade rules, targeted tax breaks for business and worker training programs to continue a mini-surge in manufacturing employment, the government's principal fact-finding agency on labor and economics was predicting slow growth for regions that depend most on manufacturing.

Which view is more correct? The answers are vital to Wisconsin, which stands to lose more than most states if manufacturing continues its long slide – and much to gain if proposed government policies keep recent trends moving in the right direction.

Manufacturers in the United States have added about 330,000 jobs in the last two years, but that spurt followed nearly 30 years of decline. Nationally, some 7.5 million manufacturing jobs have been lost since 1980. In Wisconsin, the high tide for manufacturing jobs was March 2000, when the state had about 600,000 workers in that broadly defined sector. That compares with about 450,000 manufacturing jobs today. Even with the decline, however, Wisconsin still ranks first among the 50 states in manufacturing jobs per capita.

In its latest report, the Bureau of Labor Statistics projected that manufacturing's job slide will continue – even as productivity climbs due to factors such as technology and lean management practices. By the end of 2011, according to federal data, the monthly production index stood at 93 percent of 2007 levels.

The BLS also predicted growth rates in major metropolitan regions, concluding cities dependant on manufacturing will suffer more than others. Based on industry mix, the Milwaukee-Waukesha-West Allis region was predicted to rank among the 10 slowest-growing metros by 2020. Worse yet, an analysis of the BLS data by Trulia Inc. for The Atlantic Cities showed no Wisconsin counties in the "fast-growth" category.

Projections are just that – projections, not foregone conclusions – and the fortunes of manufacturing-heavy regions and states can change quickly. However, the BLS is correct in asserting that cities and states with more diverse economies, driven by a well-educated workforce, are likely to perform better in the long run.

That doesn't mean Obama is wrong about building upon manufacturing's new-found momentum. American workers are still paid more, but the wage gap is closing in competing nations such as China and Brazil. High energy costs have increased shipping costs for goods produced abroad and sold in the United States. For higher-end goods, U.S. production makes sense because the most likely consumer markets are close to home.

Obama is also right to encourage more exports by American manufacturers, who have seized upon the growing affluence of consumers in emerging economies. Wisconsin annual exports continue to grow by healthy margins, with high-tech exports such as electro-medical equipment ranking among the growth leaders.

Even with Obama's recent pitch for policies to spur domestic manufacturing, his administration appears to recognize that other strategies are necessary to create jobs. Meeting with a mix of business and academic leaders this week in Madison, Deputy Commerce Secretary Rebecca Blank described "innovation, infrastructure and education" as linchpins for economic growth.

Those themes were largely welcomed by a Wisconsin group that encouraged the federal government not to overlook issues such as K-12 science and math education, immigration reform, merit-based grants for companies that are commercializing research, a coherent national energy policy and removal of regulatory roadblocks for science and tech businesses.

Wisconsin's economy must diversify in order to grow. That includes a revived manufacturing sector and strong financial, service, agricultural, construction and tech sectors, as well. Many manufacturing jobs are lost forever – but Wisconsin can keep more than its share by encouraging innovation, producing better-educated workers and giving industry the tools it needs to compete abroad.

-- Still is president of the Wisconsin Technology Council. He is the former associate editor of the Wisconsin State Journal in Madison.

Wednesday, February 1, 2012

The Packers are not the only organization to have a humble beginning in Green Bay and go on to national prominence.

Batteries Plus opened its first store in Titletown in 1988, an offshoot of what had been Packerland Automotive. Since then, the company has expanded into 46 states and Puerto Rico.

The company recently opened its 500th store, at 12560 W. Capitol Drive in Brookfield. That store is one of 33 in Wisconsin -- counting company-owned stores and franchises.

Batteries Plus is now listed as the largest and fastest growing battery and light bulb franchise. “We started by selling car batteries and some other car accessories,” said Jim Lauterbach, chief retail officer for the company. “Because of the complete explosion in portable power, we have expanded to carry just about every kind of battery there is (an estimated 40,000 batteries). We handle everything from a phone battery to a forklift battery.

“We include consumer electronics and batteries used in industry. We will customize specialty batteries and will assemble packs for industrial needs. We also have become a green store with recycling services for batteries and light bulbs.”

Batteries Plus began franchising in 1992. Since then, the Hartland-based company has seen years of growth. In 2011, it opened 55 new stores and signed 47 franchise deals to open 67 new stories.

Franchise Times lists Batteries Plus as the fifth fastest growing franchise in the world in terms of unit growth. Entrepreneur Magazine ranks the company No. 1 among retail battery franchises.

Lauterbach said the franchise structure of the company has been a big factor in its growth and has drawn entrepreneurs from other fields of business. “We have an extensive training program for our franchisees,“ he said. “We have a school they attend and offer online courses that keep them up-to-date. You need not have a technical or engineering background to open one of our franchise stores.”

The company has been very adept at “piggybacking off consumer electronic trends.”

“Just five years ago, many electronic products we use today did not exist,” Lauterbach said. “We have done everything we can to keep up with the trends and add to our products and services.”

Batteries Plus carries light bulbs for recessed lighting, track lighting, incandescent and CFL use to the more specialized bulbs for cars, health care equipment, aquariums, projectors and much more.

Lighting experts can show customers the value of switching from incandescent bulbs to CFLs or LEDs when lighting their homes or businesses.

“In addition to our franchise owners and their employees, we are linked to certified contractors who are very knowledgeable in batteries and light bulbs,” Lauterbach said. “They have the expertise to help with retrofitting, technical problems and many other things.”

CEO Russ Reynolds said, “Batteries Plus can fulfill virtually any light bulb or battery request from consumers and businesses alike. If we don’t have a battery you need, we can often build it.”

Lauterbach said he notes increased demand for recycling and green services from customers. “They are genuinely concerned about mercury content in older bulbs and how to recycle them,” he said. “The same can be said for batteries. They want to do what is right, because often it also makes business sense.”

Batteries Plus has worked closely with the state Focus on Energy on green projects, retrofitting and conversions to cleaner forms of technology.

The company uses both the internet and its physical stores in marketing and sales.

“As is the case with other companies, we have found many of our customers want to do comparison shopping on the internet, but then want to come into a bricks-and-mortar business to see the product, get assistance and make purchases,” Lauterbach said. “Once a customer knows what he needs, he often will make subsequent purchases over the internet site.”

As for the future of batteries, light bulbs and portable power in general, Lauterbach expects devices and the portable power to run them to keep getting smaller and lighter. “We’ve gone from a desktop where your computer might have actually been on the floor, to laptops, now to tablets and smart phones,” he said. “I expect that trend to continue.”

Extending the use of portable power -- through recharging and reconditioning -- also likely will grow, as more consumers and businesses watch their budgets. Batteries Plus already provides those services.

Lauterbach said the company was excited about hitting the 500th store milestone, and was glad it was in its home state. “In an age of increased portability and more complex devices, our society is depending on finding the right batteries and light bulbs. I look forward to meeting the ongoing battery and light bulb needs of the Brookfield community.:

Batteries Plus is based in Hartland and owned by Roark Capital Group, an Atlanta-based private equity firm.

The U.S. battery replacement market has surpassed $30 billion and is estimated to reach $34.6 billion by 2014. The light bulb replacement market is estimated to reach $14 billion.